Quick answer: Don't panic. Claim denials happen, and most of them are fixable. The most common reasons are documentation issues (not a problem with your eligibility). Here's how to figure out what happened and get it resolved.
Step 1: Find Out Why It Was Denied
Your HSA/FSA admin should tell you the reason for the denial. Common reasons include:
"Insufficient documentation" - They need a more detailed receipt or additional paperwork
"Not an eligible expense" - They don't recognize the product as HSA/FSA eligible. Many HSA/FSA admins are still adjusting to this newer form of reimbursement, but IRS regulations are clear: with a valid LMN from a licensed healthcare provider, these expenses are eligible. This has been the case for many years under IRS rules governing HSA and FSA accounts.
"LMN not accepted" - They have an issue with the format or content of your LMN
"Receipt doesn't match" - The receipt is missing details like the product name or purchase date
If the denial notice is vague, call your HSA/FSA admin directly and ask for the specific reason. Write it down - you'll need it for the next step.
Step 2: Let Us Know
Once you have the denial reason, reach out to us through chat. Tell us: - Which HSA/FSA admin denied it (Navia, WEX, HealthEquity, etc.) - The specific reason they gave - The product you were trying to get reimbursed for
We deal with these situations regularly and often know exactly what each admin needs to approve the claim.
Step 3: We'll Help You Fix It
Depending on the denial reason, here's what we can typically do:
If they need more documentation: We can provide a detailed receipt, an itemized invoice, or additional medical documentation to satisfy their requirements.
If they say the product isn't eligible: We'll provide supporting documentation showing IRS eligibility, along with your LMN that ties the product to your specific health needs.
If they have an issue with the LMN: We'll work with you to understand what the admin needs and, if necessary, get updated documentation from our medical team.
Step 4: Resubmit Your Claim
After we get you the right documentation, submit it to your HSA/FSA admin. Most admins have an appeal or resubmission process — some let you upload online, others need a phone call.
Common Denial Reasons (and What's Really Going On)
"This is not an eligible product"
Some FSA admins have a narrow view of what qualifies. They might see "gym membership" or "Apple Watch" and reject it automatically because those products aren't on their default eligible list. The thing is, with an LMN, these products ARE eligible under IRS rules because they're being used to help prevent, manage, or reverse a specific health condition.
Fix: Submit the LMN alongside your claim. If they still deny it, ask them to review IRS Publication 502, which covers expenses that are eligible when tied to a specific health condition with medical documentation.
"We need an itemized receipt"
Some admins won't accept a simple credit card statement or a receipt that just shows a total. They want to see the specific product or service name, the date, and the amount. This is an itemized receipt for the product you purchased (from the retailer, gym, etc.) - not from Crates.
Fix: You'll need to get an itemized receipt from the merchant where you made your purchase. Once you have it, share it with us and we'll resubmit the claim on your behalf. Most retailers can provide an itemized version if you ask.
"We need an Explanation of Benefits (EOB)"
Some admins handle the reimbursement process like a traditional medical claim and ask for an Explanation of Benefits. Keep in mind that most of the time, you're submitting for reimbursement for a specific product — an Apple Watch, a gym membership, a yoga studio, etc. — and there's no EOB in the traditional sense for those purchases. What they typically need instead is an itemized receipt from the merchant.
If they're asking for an EOB related to the Crates service itself, Crates is not an insurance company, so there's no traditional EOB. However, we can provide an itemized receipt for our service.
Fix: Reach out to us. We'll help you figure out exactly what your admin is looking for and provide the right documentation.
Admin-Specific Tips
Different HSA/FSA admins have different quirks. Here's what we've seen:
Navia: Can be strict on what they consider "eligible products." When submitting, include both your LMN and a clear receipt showing the product name.
Inspira: Often asks for itemized receipts. Make sure your receipt shows the specific product, not just a dollar amount.
P&A Group: Strict on product specificity. Your LMN should name the exact product, not just a category.
HealthEquity: Generally smoother process. Upload your LMN and receipt through their member portal.
Fidelity: One of the easiest and smoothest processes. Typically quicker turnaround on claims.
Frequently Asked Questions
Is it normal for claims to get denied? It's not normal, but it does happen from time to time. FSA admins in particular have strict substantiation requirements. A denial doesn't mean you did something wrong - it usually means they need more documentation. We'll support you through the entire process to get it resolved.
Will Crates help me appeal? Yes. We'll help you get the right documentation together and can guide you through the resubmission process.
What if they deny it again after the appeal? Reach out to us. We'll review the situation and figure out next steps together. In some cases, escalating through your employer (who chose the FSA admin) can help.
How long does the appeal process take? Most appeals are resolved within 1-2 weeks, depending on the admin. Some are faster.
Can I prevent denials in the first place? Submit your LMN with your first claim (don't wait for them to ask for it). Make sure your receipt is itemized and clearly shows the product name, date, and amount. These two things prevent the majority of denials.
Still Need Help?
Chat with us or email [email protected]. We know how frustrating claim denials are, and we want to help you get it sorted.